RICHMOND, Va.-After years of hunkering down on capital improvements, rebounding bottom lines at many credit unions have core conversions or technology upgrades back on the expenditures budget for 2013 and 2014.
But the excitement over the efficiencies and broadened menu of offerings is quickly tempered by the sobering reality of the challenge of core conversions, even when they go well. Credit unions that now have gone through the process make it clear that detailed planning combined with repeated communications are critical to making the process work.
Case in point is Virginia Credit Union here, which is now able to look back on its decision to migrate to a new core system as one that was worth the time and effort invested.
"The credit union was utilizing a platform that was to be sunset. This change would result in a mandatory conversion, so the credit union viewed this as an opportunity to consider other platforms," recalled VACU SVP/CIO Chris Saneda. "Additionally, the platform had many limitations and the credit union was interested in a more flexible, browser-based user front end."
As is usually the case with such a significant technology undertaking, the discovery and selection process was long and varied. For the $2.4-billion VACU, the search process took 18 months. "We formed a host system review cross-functional team, which was comprised of subject-matter experts representing key areas of the credit union," noted Saneda.
That core team defined VACU's primary needs, including teller package, MS platform, consumer loan, real estate, GL/accounting, ACH/item processing, call center, regulatory/security, product development, back-office, supports, business accounts and account controls.
"Additionally, the core team identified a number of requirements, which included categories such as industry standards, delivery channels, print options, security and business resumption," said Saneda.
When the search process was completed, four vendors remained standing. Respective vendors performed system demonstrations onsite with participant comments captured through internal surveys. "Based on this feedback and other criteria, the selections were narrowed to two," said Saneda. "A smaller team of employees visited credit unions using the finalists' platforms and participated in user group conferences."
The staff selected to participate in the selection process then completed three surveys over a five-month time period of the remaining two vendors. "Multiple surveys ensured we captured the team's perspective over the extended selection period," said Saneda. "The results quantified the staff's system preference, which was the MISER solution."
While perhaps not considered a core "household" name in the industry, the Jackson, Fla.-based FIS MISER has gained traction in recent year and serves all financial institutions with CUs representing 26% of its business.
Multiple Options An Attraction
Virginia CU, with 224,000 members and 16 branches, ultimately selected MISER due to its proven stability provided through the Unisys mainframe, noted Saneda. Other selling points included flexibility provided by middleware XML that allowed easier integration with third-party systems. Saneda said that the discovery team was also attracted to the multiple parameter options provided that allowed for stress-free customization.
"We have easy access to source code if customization is desired, and it's easy to navigate. The browser-based front end eliminated the need to memorize transactions," said Saneda. "Its business intelligence and reporting tools allow business areas direct access to data."
Converting to a new core system is a stressful undertaking as it represents the foundation and functionality of the CU. If any variable in the equation is wrong, member confidence will be shaken. "There is little room for error during a core conversion, success is dependent on preparation and buy-in," said Saneda.
The IT department, along with FIS MISER support, worked diligently, agreeing on what data was to be converted as well as what data was to be deleted. To that end, the mapping and converting of data from one system to another while managing the balance of data was a challenge. At the same time, the team had to integrate and test all third-party interfaces, set job schedules and commit to solid delivery dates to be used in member communications.
Two mock conversions were performed and testing was conducted over a six-month period before launch. "Comprehensive on-site training was provided for IT staff and our team ran nightly production schedule during testing and certification."
It's been more than five years since VACU went through the core conversion process, and its product menu today reflects the ability to support products not previously available, which include business services and dynamic loan products. The MISER platform also allowed the credit union to conduct faster transaction processing supporting significant growth, noted Saneda.
"There was a reduction in operator errors, increased up-time supports member demand for 24x7 access and visibility to data that enables staff to work with members and act in their best interest."
In hindsight, the conversion was completed without a hitch. "It's a more reliable, stable system that builds confidence in both staff and members," said Saneda. Since conversion launch, VACU has received periodic updates making the platform fully scalable. "VACU thoroughly tests each release, which occurs twice a year, prior to promoting it to production. Due to its flexibility and vast functionality, if we typically find something that does not work the way it previously did, or the way we think it should, FIS is responsive to meet our concerns."
Looking Forward
As the credit union looks forward, it does so with knowledge that its core operating system will continue to meet the needs of its members. "We consider ourselves progressive, certainly not bleeding edge, but aggressive in maintaining a relevant posture in the market place," said Saneda. Saneda explained that there have been industry murmurs that a concern exists regarding MISER's Cobol foundation. In response, he said FIS has a solid XML-based middleware in place, Cohesion, which provides a window into MISER. If auxiliary functionality is required, for example, it can be developed and easily interfaced to the core.
